Silicon Valley’s inequality intensifies even as job market booms

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Thomas Cole of Airstreams Renewables, left, talks to Tyler Golightly at the "Hiring Our Heroes" job fair for veterans held in San Jose, Calif. on Thursday, April 11, 2013. The job fair was held at the American Legion Willow Glen Post 318. The fair is a program by the U.S. Chamber of Commerce Foundation designed to help military veterans, active duty military and military spouses find employment. (Gary Reyes/ Staff)

Andrew Stevenson of Walgreens answers question from Jennifer Jimenez, Antoinette Olivarez and Leanna Gonzales during the Employment Connection Job Fair in San Jose, Calif. on Thursday, July 25, 2013. The annual job fair was sponsored by the Santa Clara County Social Services Agency. Hundreds of job seekers attended the event which was focused on serving CalWORKs clients including those who have timed out because of existing State regulations. However, the general public was invited. About 40 employers participated in the event. (Gary Reyes/Bay Area News Group)

Yet the same Silicon Valley that has produced dazzling breakthroughs in technology and the way people live, work and entertain themselves now must cope with stagnant wages and skyrocketing residential costs that challenge middle- and low-income workers, the Silicon Valley Index shows.

During 2013, the San Francisco-San Mateo-Marin region posted a 2.6 percent gain in jobs for the year, while Silicon Valley — defined as Santa Clara County, San Mateo County, Fremont, Union City and Scotts Valley — added 46,700 jobs, up 3.4 percent during the year.

In 2006, 21 percent of the households of Silicon Valley had yearly income levels of less than $35,000, 40 percent — the middle class — had income ranges from $35,000 to $99,000, and 39 percent had annual income levels of $100,000 or more.

By 2012, the most recent year for which the data were compiled by Joint Venture, 20 percent of households had incomes less than $35,000, 35 percent were in the $35,000 to $99,000 range, and 45 percent had incomes of $100,000 or more, the report said. The 2012 income figures were not adjusted for inflation.

“This is a tech-led recovery,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy and a consultant for the report. “But wages at the bottom of the income ladder are stagnating.”

The authors of the report say an economic boom hasn’t been broad enough to bolster the financial fortunes of all of Silicon Valley’s residents.

“Rising tides do not lift all boats,” said Emmett Carson, president of Silicon Valley Community Foundation, a philanthropic organization that co-authored the report. “Income inequality continues here. Inequality won’t get solved just because you have a robust economy. Deliberate policy actions are needed.”

Housing is one of the big problems that challenge low- and middle-income workers. Median household income, adjusted for inflation, is rising by about 2.8 percent a year in Silicon Valley, according to the most recent figures compiled by the report. But during 2013, apartment rents in Silicon Valley rose 4.4 percent to an average of $2,127 a month.

Still, the report made it clear that the surge in the regional economy is remarkable by just about any measure.

In 2013, while total jobs expanded 3.4 percent in the combined region of Santa Clara and San Mateo counties, the fastest-growing industry was Internet and information services, which powered to a gain of 19.1 percent, according to the report. The next strongest sectors, and the only other sectors with double-digit gains, were administrative services, up 12.4 percent, and utilities, up 11.4 percent, the report determined.

“The Silicon Valley economy is sizzling like nowhere else in the country,” Hancock said. “It’s cloud, mobile devices, apps, software, social media, Internet — those are the leaders of this boom.”

The report’s authors also suggested that Silicon Valley increasingly has to include San Francisco, home to Twitter, Salesforce and other tech firms.

“Silicon Valley and its innovation stretches from Market Street in San Francisco to Market Street in San Jose,” Hancock said.

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